By: TAHP | Friday, October 6, 2023

A new secret shopper study by University of Texas researchers discovered that hospital prices posted online can be wildly different than quotes provided to patients over the phone.

Why it matters: Health care prices are irrationally high and vary, even for routine care.

• Price transparency laws were meant to arm patients with information needed to make value-driven health care decisions.
• If the advertised price is wrong, patients and their families can’t make informed choices.

Spurred into action: As Vox reports, Dr. Peter Cram was inspired to conduct the study after he heard Mark Cuban talk about his own frustration with poor price transparency, and together, they designed a study to find out.

The study in detail: The team compared the prices hospitals displayed online, as mandated by federal hospital price transparency laws, with the quotes they received over the phone while posing as potential patients.

Here’s what they found: The researchers learned that “online and phone cash prices were poorly correlated for a given hospital” in the study.

• At two hospitals, the listed price for an MRI was $2,000. When the secret shoppers called, however, they were given a price of more than $5,000 when they called.
• Moreover, the discrepancies in pricing aren’t minor. Five hospitals quoted $10,000 for routine childbirth over the phone. The online price, however, was twice that much.
• 😱 10% of hospitals were never able to produce a price over the phone for either procedure after multiple calls and extensive wait times.

Missing data: Hospitals have also been slow to comply with price transparency laws altogether, with only 60% reportedly in compliance and some questioning if that number is even accurate.

The recent UTMB study is a wake-up call. It’s a reminder that while we’ve made progress with health care price transparency, there’s still a long way to go.

Charting the Path Forward:

1. Increase accountability: Texas must ensure hospitals provide consistent and accurate pricing.
2. Expand price transparency to all shoppable services that occur outside of a hospital, including ambulatory surgical centers, physician offices, lab and imaging centers, and freestanding ERs.
3. Pair price with quality transparency: Eliminate barriers to sharing independent, nationally recognized performance and quality data. This empowers patients to make informed, value-driven decisions.
4. Require transparent billing practices: Require billing practices that accurately reflect the site of service to prevent hidden facility fees and unexpected costs for patients.

➡️ The bottom line: Opaque billing and misleading practices are both unfair to patients and work against efforts to drive down health care spending to create savings for Texas patients and employers.